NJ’s About-Face On Sports Betting Will Reignite Legal Row

September 8, 2014 – In The News

Patrick Madamba, Jr. was quoted in the Law360 article, “NJ’s About-Face On Sports Betting Will Reignite Legal Row.” Full text can be found in the September 8, 2014, issue, but a synopsis is below.

The New Jersey attorney general’s directive to allow sports betting at casinos and racetracks is a legal curveball that raises novel states’ rights arguments and will send sports leagues racing to court to restart litigation thought to be settled in an attempt to stop the policy, attorneys say.

New Jersey contends that while the appeals court decision said the state could not authorize sports betting because of the Professional and Amateur Sports Protection Act (PASPA), the decision also said that the state is not barred from repealing its existing ban on sports betting.

The state’s use of the sports leagues’ own arguments that PASPA does not commandeer states to take certain actions as ammunition is sure to spark new litigation and will force the sports leagues to tackle the new states’ rights issues raised by New Jersey.

“It's a Catch-22 for the sports leagues. The way they saved PASPA from being shown unconstitutional was to say, 'No, states aren't being forced to do anything through the law,'” said Patrick Madamba Jr.

According to Madamba, it will be difficult for the sports leagues to argue that the provisions of the Sports Wagering Act the state contends repeal its original sports wagering ban are unconstitutional after arguing that such a repeal is allowed.

Regulators will need to be careful about not penalizing casinos or racetracks for something they do in sports betting, Madamba said.

While having to deal with wrongful activity without regulating it could put the state in a difficult spot, Madamba says that issue can be solved using consumer fraud actions to handle wrongdoers.

“There are plenty of protections that consumers are afforded under general consumer protection laws,” he said.